It is well established that ErbB1 and ErbB2 can cooperate in mammary epithelial cell transformation. Therefore, to understand how ErbB1/ErbB2 signaling contributes to this process, we used the ErbB kinase inhibitor AG1478in ErbB2-dependent BT-474 and SKBR-3 human breast cancer cells. These cells overexpress ErbB2 and also display moderate levels of ErbB1. Treatment with AG1478 resulted in rapid ErbB2 dephosphorylation, reversible G(1) arrest, and interruption of constitutive mitogen-activated protein kinase (MAPK) and phosphatidylinositol 3-kinase (PI3K)/Akt signaling. Consequently, both MAPK-dependent transcription of cyclin D1 and phosphorylation of the cyclin-dependent kinase (Cdk) inhibitor p27 were inhibited. The inhibition of PI3K/Akt resulted in increased activity of glycogen synthase kinase-3beta, which phosphorylated cyclin D1, potentially reducing its steady-state levels. The loss of cyclin D1 reduced the amount of cyclin D1/Cdk4 complexes that can sequester p27 in the cytosol. This plus the reduced phosphorylation of p27 by MAPK enhanced the stability of p27 that associated with nuclear Cdk2 at high stoichiometry and inhibited its kinase activity. Antisense p27 oligonucleotides decreased p27 levels and abrogated the G(1) arrest induced by AG1478. Similarly, infection with an adenovirus encoding inducible cyclin D1 also counteracted the antiproliferative effect of AG1478. These data imply that: (a) modulation of both p27 and cyclin D1 are required for the growth arrest that results from blockade of the ErbB2 kinase; and (b) ErbB2 overexpressing cells use both MAPK and PI3K/Akt to modulate p27 and cyclin D1 and, hence, subvert the G(1)-to-S transition.